The Pennsylvania Pension Mess

The biggest scam going in American financial life may be the collusive effort by Wall Street, the political class, and public sector unions to use union retirementmoney to prop up Wall Street speculation.

The Pennsylvania State Employees’ Retirement System, for example, has more than 46 percent of its $26.3 billion in assets invested in riskier alternatives, including private equity funds and real estate. Over the last five years, the system paid roughly $1.35 billion in management fees – over 5 percent of the total value of the fund over a five-year period – while realizing an annualized return of just 3.6 percent, well below the 8 percent it needs to meet its financing requirements and also lagging behind the 4.9 percent median return for all public pension systems.

There’s bad news for Pennsylvania’s teachers, too:

The $51.4 billion Pennsylvania public schools pension system…which has 46 percent of its assets in alternatives, pays more than $500 million a year in fees. It has earned 3.9 percent annually since 2007.

Sorry, Spencerblog, but I've read enough already. Just can't bring myself to read the entire article. Too frustrating and depressing. But, on the positive side, "the private sector is doing fine." It's only the public sector that is having problems because governments, federal-state-local, can't raise taxes fast enough to fund the obligations they have promised to so many over the past 30 plus years.